Commentary on 108-A of ITAA 1997: CGT asset rules

Dabner, Justin (2005) Commentary on 108-A of ITAA 1997: CGT asset rules. In: Murray-Jones, Ian, (ed.) Australian Tax Practice. Thomson Legal and Regulatory, Pyrmont, NSW, Australia, - .

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[Extract] Subdivision 108-A of Pt 3-1 of ITAA 1997 defines the term "CGT asset": ss 108-5 and 108-7. The definition is particularly broad. It provides that a CGT asset is any kind of property, or a legal or equitable right that is not property. Furthermore, it provides that, to avoid doubt, the following are CGT assets:

• a part of, or an interest in, property or a legal or equitable right that is not property;

• goodwill or an interest in it;

• an interest in a partnership asset; and

• an interest in a partnership that is not an interest in a partnership asset.

The width of the definition is a response to the original version of the CGT, the application of which was restricted to assets of a proprietary nature, namely rights which could be assigned. The current definition makes it clear that CGT assets include both assets of a proprietary nature (see [108-A.1200]) and other rights otherwise enforceable by law (see [108-A.1300]). Clearly both assets of a tangible and intangible nature are included within the definition.

The significance of the definition is essentially that the most common CGT event, event A1 (s 104-10), applies upon the change in ownership of a CGT asset. However the term also has significance for the application of other CGT events, for example CGT event E1 (s 104-55), CGT event H2 (s 104-35), CGT event J2 (s 104-185) and CGT event K4 (s 104-220).

Furthermore, s 121-35 specifies that taxpayers are to maintain a CGT asset register.

It should be noted that the extension of the definition to expressly include non-proprietary and legal or equitable rights was inserted in 1992 and only applies where the rights were created after 25 June 1992: see [108-A.1300].

Item ID: 4992
Item Type: Book Chapter (Research - B1)
ISBN: 978-0-86460-011-0
Keywords: taxation, taxation law, Income Tax Assessment Act 1997
Date Deposited: 31 Aug 2010 00:25
FoR Codes: 18 LAW AND LEGAL STUDIES > 1801 Law > 180125 Taxation Law @ 100%
SEO Codes: 97 EXPANDING KNOWLEDGE > 970118 Expanding Knowledge in Law and Legal Studies @ 100%
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